Margaret R. Hyland, 85, a former sales clerk in the toy department of the Woodward & Lothrop store in Chevy Chase and a lifelong resident of the Washington area, died of congestive heart failure Monday at Sibley Memorial Hospital.

Mrs. Hyland was born in Washington and attended St. Patrick's Academy. She had been a member of the parish of St. Gabriel's Catholic Church and its sodality.

She later lived in Bethesda and was a member of the parish of the Church of the Little Flower. For the past eight years, she had lived with her daughter, Catherine H. Gregg, in Rockville, and belonged to the parish of St. Patrick's Catholic Church in Norbeck.

For about three years in the early 1930s, Mrs. Hyland worked at the Government Printing Office. From about 1950 until 1955, she worked in the reference room of the Interstate Commerce Commission. For the next 10 years she was employed in the toy department of Woodies in Chevy Chase.

Her husband, Daniel P. Hyland, an employe of the GPO, died in 1971.

In addition to her daughter, Mrs. Hyland's survivors include two sons, Daniel E., of Clarkburg, Md., and John H., of Troy, Mich.; 10 grandchildren, and five great-grandchildren.